Buying a new house
Quality standards and warranties
UK - Property
The vast majority (over 80 per cent) of people in the UK live in houses rather than apartments. Most people don’t like apartment living and want their own detached home with a garden and garage because they prefer more traditional styles.
Most people aren’t keen on the more modern, high-tech homes favoured by some developers. Houses are also generally better value than apartments and a better investment. However, a major factor may be the size, as homes are getting smaller (particularly apartments) and new homes are a third smaller than 80 years ago. Some new homes have incredibly small rooms and a modern three or four-bedroom house can be smaller than a two-bedroom Victorian cottage!
After having decided to buy a house, your next decision will be whether to buy a new or an old home. The advantages of new homes include:
- Modern bathrooms, a fully-fitted modern kitchen, central heating, good insulation, modern facilities, low maintenance, good security and storage.
- No work to do and you can move in immediately.
- Fewer problems – new houses are generally maintenance-free and there are no costs or problems associated with renovation or modernisation.
- Lower running costs than old homes. Most new buildings use low maintenance materials and have good insulation and ventilation, providing lower heating bills and keeping homes cooler in summer.
- It’s often cheaper to buy a new home than modernise or renovate an old property, as the price is fixed (although you can haggle!), unlike the cost of renovation which can soar way beyond estimates.
- Easier to obtain a mortgage.
- Comes with a builder’s warranty against defects (see below).
- Can usually be let immediately.
- Modern homes have good resale potential and are considered a good investment by most buyers.
- You cannot be gazumped!
The disadvantages of a new home include:
- Lacking the history, charm and character of an older building.
- Little individuality or exclusivity (all homes in a development may be exactly the same).
- Gardens lack mature plants and trees.
- Teething troubles.
- Slower capital growth than an old property (they lack ‘rarity’ value).
- Possible restrictive covenants.
- Unfinished development and communities without local shops and services.
- They’re usually smaller than old properties with lower ceilings, smaller rooms (some are tiny, made to look bigger by shortened beds and smaller furniture) and less sense of space.
- They may be impossible to expand.
- They rarely have a large garden or plot of land.
- You may need to buy off plan and run the risk of the developer going bust or the property being worth less than you’ve paid when you take possession – although it’s more likely to be worth more!
Quality of Construction
The quality of new buildings in the UK is strictly regulated and they must conform to stringent building regulations and energy efficiency standards. However, the quality of new homes is extremely variable and some developments, e.g. apartments in major cities sold off plan, suffer from poor quality. Many developments in London and other cities are built for the investment (letting) market and aren’t suitable for owner-occupiers.
Your best insurance when buying a new house is the reputation of the builder and it pays to buy from a long-established builder with a reputation for quality. The price may be marginally higher than buying from a builder who uses ‘cowboy’ contractors and refuses to honour his warranty, but it will be well worthwhile in the long term. Before buying a new home you should check what other developments the builder or developer has completed recently, make an inspection visit and ask owners what problems they have experienced.
Developers generally employ high standards of materials and workmanship and homes have higher specifications than old houses, including double or triple-glazing, cavity and under-floor insulation, and central heating. Luxury ‘intelligent’ homes have discreet systems that allow you to control the temperature, lighting, security, music and TVs via wall-mounted or remote controls. They may also have broadband (internet) connections in all rooms. Some developers also offer specially-designed live-work homes for those who work from home.
Most new properties are covered by the National House Building Council’s (NHBC, Tel. 0845-845 6422, www.nhbc.co.uk), Buildmark 10-year warranty or the Zurich Municipal Building Guarantee (Tel. 01252-522000). Most lenders will refuse to lend against a new house without a warranty. The NHBC warranty covers the owner for claims of up to £10,000 against the builder’s failure to complete the house, for the loss of a deposit (up to 10 per cent of the agreed price) or any expenses incurred in completing building work.
Buying new isn’t all roses and it isn’t unusual for new homes to have hundreds of (mostly minor) faults.
During the first two years the builder should make good any defects – termed ‘snagging’ – arising from his failure to meet NHBC requirements. During the first two years in a new home you MUST list all the things that require fixing that are the responsibility of the builder and make sure that they are put right. Several websites (such as www.snagging.org) offer snagging ‘lists’ to use as a guide.
Alternatively you can hire a professional to do the snagging for you, which is highly advisable as they know what to look for, have more leverage and will reduce the stress. It’s best to hire a chartered surveyor (at a cost of £150 to £300 depending on the number of rooms) or you can use a company such as Inspector Home (Tel. 0845-051 1015, www.thesnaggingprofessionals.co.uk) or New Build Inspections (Tel. 0845-2266 486, www.newbuildinspections.com). If you use a company, make sure that they are qualified and that you receive a quotation. If you fail to register a defect within the two-year period you have no claim unless it comes under ‘major structural damage’.
The NHBC warranty (which is half funded by developers) has been accused of being toothless when it comes to getting ‘minor’ faults rectified and the NHBC is slow to act and soft on builders (the building trade enjoys the luxury of self-regulation).
During the next eight years you’re only insured against major structural damage caused by defects in the structure, subsidence or heave. If you find or suspect any building defects within the first two years, you should inform the NHBC in writing and have a survey done to ensure that your property is sound. The Zurich Municipal Building Guarantee provides a similar 10-year warranty, including protection against a builder going bust before a property is completed.
Home and property magazines contain a wealth of information about new homes, including a list of new developments throughout the country, and numerous advertisements from builders and developers. Daily newspapers are a good source of information, particularly the quality Saturday and Sunday newspapers such as The Times and The Telegraph (Saturday editions), and The Sunday Times and The Sunday Telegraph. Many home and property exhibitions are held throughout the UK, including the Daily Mail Ideal Home Show, staged in March at the Earls Court Exhibition Centre (London), the biggest and best of all, the House & Garden Fair (held in June at the Olympia Exhibition Centre, London) and the Evening Standard Homebuyer Show (www.homebuyer.co.uk). You can also search for a new home on the internet with Your New Home (www.yournewhome.co.uk), new-homes.co.uk (www.new-homes.co.uk) and Smart New Homes (www.smartnewhomes.co.uk).
This article is an extract from Buying, selling & letting property (UK). Click here to get a copy now.
- First-Time Buyers:
- Buying an old house:
- Buying an apartment:
- Purchasing an apartment:
- Buying for Investment:
- Avoiding Problems:
- Valuations & Surveys:
- Purchase Contracts:
- Property fees:
- Buying at Auction:
- Buying to Let:
Does this article help?
Do you have any comments, updates or questions on this topic? Ask them here: